(Equity Securities Entries) On December 21, 2025, Bucky Katt Company provided you with the following...
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Accounting
(Equity Securities Entries) On December 21, 2025, Bucky Katt Company provided you with the following information regarding its equity investments.
Investments
Cost
Fair value
Unrealized gain (loss)
Clemsom Corp. stock
$20,000
$19,000
($1,000)
Colorado Co. stock
10,000
9,000
(1,000)
Buffaloes Co. stock
20,000
20,600
600
Total of portfolio
50,000
48,600
(1,400)
Previous fair value adjustment balance
-0-
Fair value adjustment Cr
($1,400)
During 2026, Colorado Co. stock was sold for $9,400. The fair value of the stock on December 31, 2026, was Clemson Corp. stock$19,100; Buffaloes Co. stock$20,500. None of the equity investments result in significant influence.
Instructions
a. Prepare the adjusting journal entry needed on December 31, 2025.
b. Prepare the journal entry to record the sale of the Colorado Co. stock during 2026.
c. Prepare the adjusting journal entry needed on December 31, 2026.
Answer & Explanation
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